Schnitzer Steel Industries, Inc. reported Thursday financial results for its fiscal 2015 first quarter ended November 30, 2014, stating that during the quarter, the market experienced the steepest decline in ferrous prices since 2012. From September through November 2014, ferrous export selling prices declined approximately $80 per ton, or 20 percent, and ferrous domestic prices declined approximately $60 per ton, or 15 percent.
For the quarter, the company reported adjusted earnings per share of $0.08, excluding the adverse impact of reselling or modifying the terms of certain previously contracted bulk ferrous shipments and charges attributed to restructuring. This compares to the first quarter of fiscal 2014 adjusted loss per share of $0.18, excluding charges attributed to restructuring. The reported loss per share of $0.09 for the first quarter ended November 30, 2014 compares to a reported loss per share of $0.23 for the prior year quarter.
During the first quarter of fiscal 2015, all three business segments generated positive operating income, largely due to benefits from productivity initiatives. The Metals Recycling and Auto Parts Businesses were both significantly impacted by the decline in ferrous selling prices, resulting in an adverse impact from average inventory accounting estimated to be approximately $9 million, or $0.23 per share, which offset the benefits of productivity improvements and cost savings. Metals Recycling's adjusted operating income per ton of $8 excluded the impact of reselling or modifying the terms of certain previously contracted bulk ferrous shipments for delivery during the first quarter of approximately $6 per ton. Metals Recycling's reported operating income per ton of $2 increased from $1 operating income per ton reported in the first quarter of fiscal 2014, notwithstanding an estimated adverse impact of approximately $7 per ton from average inventory accounting.
"While global commodity markets remain challenging, the recovering US economy is driving higher domestic demand for steel. Our Steel Manufacturing Business more than tripled its first quarter operating income versus last year benefiting from higher selling prices, increased rolling mill utilization and contributions from productivity improvements. In our Metals Recycling Business, we delivered ahead of schedule on our productivity improvement and cost savings initiatives which contributed significantly toward year-over-year improved performance in that segment," said Tamara Lundgren, President and Chief Executive Officer. "We are continuing to take steps to improve business efficiency and reduce our cost base across our organization. We have identified further targeted initiatives in our Auto Parts Business and now anticipate annual benefits of $14 million, which is up from the $7 million we previously announced, approximately half of which we expect to realize during the second half of fiscal 2015. We believe these actions will continue to enhance our performance and should provide greater opportunity for margin expansion as market conditions improve.”